Singh Says Indian Economy Will Fight Back

19 June 2012 17:00 - Phoebe Robinson

Singh Says Indian Economy Will Fight Back

Anxiety over the fall in India’s economic growth was shown by Prime Minister Manmohan Singh at the G20 summit in Mexico today. He said that his country is “impatient” for a return to high growth and faster jobs creation.

“Like other countries, we too allowed the fiscal deficit to expand after 2008 to impart a stimulus. We are now focusing on reversing the expansion. This will require tough decisions, including on controlling subsidies, which we are determined to take," Singh told the summit.

India is aiming at a fiscal deficit of 5.1% of GDP for this fiscal year but higher subsidy bill and lower tax revenue have resulted in its fiscal projections for 2011-12 to go awry. The fiscal deficit was 5.8% in 2011-12, wider than the initial target of 4.6%. 

India’s growth hit a nine-year low of 5.3% in the fourth quarter of 2011-2012. Referring to the dip in India similar to other emerging countries the Prime Minister admitted that internal constraints as well as other factors had affected the performance of the economy and that the Indian government was trying to amend them.

Singh said "We are taking steps to revive investor sentiment. We are determined to create an environment that would boost investor sentiment and promote an atmosphere conducive to enterprise and creativity,"

The PM went on to say “The fundamentals of the Indian economy remain strong and we are confident of bringing back the rhythm of high growth of 8-9 percent per annum.” Showing that the country was not in huge trouble and its reputation as a booming economy is soon to be restored.